A pericentric chromosome 16 inversion, inv(16)(p13;q22), is present in almost 100% of patients with the M4Eo subtype of acute myeloid leukemia. A fusion gene between CBFB, the gene for a subunit of transcription factor CBF/PEBP2, and MYH11, which codes for smooth muscle myosin heavy chain, is generated by this chromosome 16 inversion. This fusion gene is believed to play a key role in leukemogenesis. We recapitulated this fusion gene in mice by inserting a human MYH11 cDNA into mouse Cbfb gene by homologous recombination (denoted "knock-in", or KI). Embryos heterozygous for the fusion gene had defects in both primitive and definitive hematopoiesis and died in midgestation due to widespread CNS hemorrhages. The phenotype provides very powerful evidence for a dominant negative function of Cbfb-MYH11 in the CBF pathway, and demonstrates the importance of this fusion gene in the regulation of growth and differentiation of hematopoietic cells, which may contribute to leukemogenesis. To study the the effect of the fusion gene on adult hematopoiesis and its leukemogenic capability, we are creating a conditional KI using the Cre-lox system. Under this design, the fusion gene CBFB-MYH11 is not transcribed until the DNA sequence between lox sites is deleted by Cre-lox recombination. This way, mice carrying the fusion gene (lox-KI) will survive to adulthood and the fusion gene will then be activated by expressing Cre within selected cells. We have already obtained viable adult mice carrying the lox-KI gene and are testing different systems for Cre expression. Using green fluorescent protein and immunofluorescence we observed that the CBFb protein was distributed equally in the cytoplasm and nucleus of 3T3 cells. CBFa was normally localized to the nucleus and co-expression with the heterodimeric partner CBFb resulted in exclusive nuclear localization of CBFb. The fusion protein Cbfb-SMMHC on the other hand appeared to assemble into cytoskeletal and higher order structures, and was able to trap CBFa into these structures. This observed CBFa sequestration may explain the dominant negative function of this inv16 fusion protein. To assess whether the hemorrhages observed in Cbfb-MYH11 KI embryos were a consequence of the fusion gene's expression in CNS, or resulted from impaired coagulation due to lack of megakaryocytopoiesis, Cbfb expression was analyzed by in-situ hybridization. Whole mounts and sections of E10.5-E12.5 embryos showed high levels of expression in dorsal root and cranial nerve ganglia, in addition to diffused expression throughout the embryos. Such patterns suggest a direct role of Cbfb-MYH11 expression in the hemorrhages in the similarly regionalized sites.